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Government grants

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Government grants

  • This topic has 1 reply, 1 voice, and was last updated 9 years ago by ming7.
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  • October 3, 2015 at 10:03 am #274794
    ming7
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Hello everybody,

    I am a new member of the group.
    I have one queetion regarding government grants capitalization. While we do acquire intangible non-current assets(e.g. Ppe) we have two methods to show it on the face of statement or not to show it. The second method when we show it and depriciate it along with ppe depr. Percent. Here is my question: at the start of the year we bought plant costing 20,000 for it we were given grant 15,000. Depr is straight line 20%. Solution: bs: ppe20,000acc.depr4,000(asset) deffered income15,000(liability)
    At the end of the year bs: ppe:16,000 deffered income: 9,000 .. why?? 9,000 and not 12,000?

    Pl: depr.expense:4,000 government grant(income) -3,000 (15,000*20%) .. and why -3,000?

    Thank you.

    October 3, 2015 at 3:00 pm #274817
    ming7
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Anyone?

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